Difference Between Whole Life Insurance and Term Life Insurance

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Planning and making decisions for your family when you are gone can be a difficult task. Who really enjoys thinking about their expiration date? To make matters worse, figuring out the best life insurance policy to choose is confusing. Whole life insurance? Term life insurance? I know you are probably thinking, ‘What do all of these terms mean and which one is more beneficial for my family?

 

Although it can be tempting to put off these decisions to a later day, it’s important to get your life insurance in order now. The funny thing about life is that we can’t always control what happens. Unexpected tragedies happen to people every day and most were not properly prepared. What was at one point unimaginable leaves their children and other family members in financial binds that all could have been prevented with some planning.

 

Term life insurance is known to be the more affordable option of life insurance plans. The lower price is due to it having no cash value until you or your spouse pass away.

 

It provides life insurance coverage for an allotted amount of time, typically in allotments of 10, 20 or 30 years. In the event that you or a spouse pass away during this time or term, your beneficiary will receive the payout from the policy.

 

When deciding how much goes towards your life insurance, consider what expenses will need to be covered in the event of your passing. Make sure the policy covers any debts, mortgages, funeral costs, college tuition or any other financial needs if you are the main provider for your family.

 

In a perfect world, the family’s need for life insurance should end around the time the term expires. This was created as a security blanket in the event that something happened to you; in the meantime you pay off debts, build savings and put your family in the best situation possible.

 

Whole Life Insurance is a bit different from term life insurance in the sense of what you get from it. Unlike term life insurance, whole life insurance covers you throughout your lifetime. You don’t choose a time-frame for it to cover you. With it covering you for life, it comes with a higher price. The cost of whole life insurance is more expensive and you must qualify for it. You must undergo a health exam in order to qualify for whole life insurance or you can avoid the health exam by paying even more money.

 

Even though this option is more expensive, it is designed to build cash-value overtime. It’s like when you buy a house and, as you pay it off, you build equity that can be exported as cash in the event an emergency occurs. Whole life insurance is the same concept translated from home buying to life insurance.

 

So it’s up to you and your living situation to determine which option is best for you and your family. The most important thing is that you don’t leave a financial weight for your family to carry once you are gone.

 

At Care Financial we offer both Whole Life Insurance and Term Life Insurance. Our consultants can go over both options that are essential in helping you make your decision when choosing the right type of life insurance policy for you and your family or business. By having life insurance you are protecting your loved ones’ financial future and protecting against the lost income that results when the insured passes away. In a time of grief, we will be there to take one less burden off your loved ones by providing financial security, thereby safeguarding your heirs from the financial impact of the death of the insured. Contact us today at 251-633-7122.

 

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